Although my crystal ball is currently in the shop, we do know where things stand in regards to the local housing market in Northern Virginia. Inventory levels of active resales are virtually the same – we currently have 7,640 homes for sale in Fairfax, Loudoun, Arlington, City of Alexandria, Prince William and Fauquier Counties. This time last year we had 7,680 – pretty similar. There is a slight difference between these two timeframes and that is in the number of distressed properties on the market. This year there are only 293 foreclosures for sale along with 882 short sales – last year, there were 450 foreclosures and 1109 short sales. This result is a difference of about 5% of the total inventory. The perception is we are inundated with distressed properties when in reality, we have a lower percentage of overall inventory than the rest of the country in relation to foreclosures and short sales. Our market is healthy.
We have a 2.6 month supply of homes which is a seller’s market. Houses are selling when the sellers have them priced right, in the right condition, and staged properly – often times with multiple offers. We had several agents engaged in multiple contract situations this past weekend with a few of those properties being listed for several months. We have buyers in our market because we have jobs. One of our agents relayed a story of his nephew and their job search. Over 140 people interviewed for a job at an oil change shop in Florida – that’s unbelievable.
Our rental market is strong, currently posting a 1 month supply of homes. The reason is people relocating into our area are gun shy on purchasing. This is as a result of a few different factors. It may be their confidence in the housing market because of where they came from to relocate here, they can’t buy because of a potential short sale or foreclosure on their credit report or they are losing out to other contracts and have a short time to find a property and get forced into renting. Either way, it is a great time to be an investor in Northern Virginia.
Prices are stable to increasing in the Washington Metropolitan area. We are seeing price increases throughout our region in several price points. Typically in house priced below $400,000 (pretty much everywhere) and those priced between $800,000 and $1,200,000 (closer into the beltway and DC). In addition, builders found their bottom in pricing towards the end of last year and the first quarter of this year and have started to escalate their prices as they have seen an increase in sales of their homes. Reports show that we are expected to have a 7.4% increase in housing prices in our region compared with -3.2% in the rest of the country – a difference of over 10%. Again, we have a healthy market.
We also have low interest rates which are fueling our sales – housing is affordable because of rates. If people are waiting to buy because they feel prices will come down – they are mistaken. If they think rates will continue to decrease, they are mistaken as rates have actually increased over the last few weeks. Now is the time to buy.